Interpath Advisory

History

2021: HIG Europe bought KPMG restructuring services unit

In early May 2021, KPMG agreed to sell its British restructuring business to HIG Europe. A little earlier, Deloitte sold its restructuring division to Teneo, a consulting company supported by CVC Capital Partners. In both cases, the transaction was aimed at eliminating an alleged conflict of interest, when firms have to audit and consult the same clients, which is fraught with serious violations of the law.

The UK Financial Reporting Board, which regulates all audit activity in the country, has instructed the big four auditors KPMG, Deloitte, EY and PwC to separate the audit practice from the rest of their business by 2024. This order followed the publication in 2019 of an independent review, the reason for which was a series of high-profile accounting scandals. Among other scandals concerned the collapse of the construction giant Carillion and the British department store BHS, whose auditors were KPMG and PwC, respectively.

KPMG and Deloitte sell restructuring services units for hundreds of millions

KPMG's restructuring unit, estimated at $556 million, will be renamed Interpath Advisory, as it will become the UK's largest independent restructuring and overhaul firm with more than 500 employees nationwide. Under the terms of the transaction, KPMG UK will continue to provide other consulting services, including consultations on debt obligations. The deal is expected to be completed in June 2021.

The reformation of the audit industry will not end there. New UK Business Secretary Kwasi Kwarteng is expected to present another series of audit sector reform proposals at the end of May.^[1]

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